Research @ Citi Episode 39: Latin America – Where Politics Meets Prosperity
Jun 25, 2025
Luis Costa, Head of Emerging Markets Strategy at Citi, shares keen insights about Latin America's evolving political and economic landscape. He discusses the transition from leftist regimes to a diverse political environment and its impact on investor confidence. Costa highlights the robust recovery of equities in Brazil, Argentina, and Chile, influenced by attractive valuations and changing U.S. dynamics. The conversation also delves into the geopolitical balance between U.S. and Chinese influences, alongside the implications of upcoming elections on economic reform.
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Latin America's Balanced Diplomacy
- Latin American policymakers have balanced support from both China and the West without causing conflict or noise.
- This balanced diplomacy supports regional equities positively.
Latin America's Political Evolution
- Latin America shifted from the 'pink tide' leftist era to more fragmented, coalition-based politics.
- Post-COVID, fiscal impulses raised inflation and fiscal balances, influencing markets and policies.
Commodities Shield Latin America
- Latin America's commodity bias buffers it against emerging market tariffs targeting industrials.
- Central banks remain cautious with monetary easing due to uncertainties in global trade and inflation.